Bootstrap First from Belarus, Raise Money Later from Silicon Valley: PandaDoc CEO Mikita Mikado (Part 3)

Sramana Mitra: People were finding this product online? What was the customer acquisition strategy?

Mikita Mikado: It was all online. It was SEO-driven. It was pretty much a zero sales effort. It was self-service.

Sramana Mitra: What was the price point?

Mikita Mikado: $10 a month.

Sramana Mitra: At $10 a user, that’s a lot of users.

Mikita Mikado: Yes, we had 3,000 accounts.

Sramana Mitra: It’s not easy to get 3,000 people to pay either, even at $10.

Mikita Mikado: Yes, the product was good and we did a ton of online marketing. Those two things came together to make this possible.

Sramana Mitra: When did you hit $30,000?

Mikita Mikado: In 2013.

Sramana Mitra: While you were building this part of the business, did you keep the CMS extension services and the add-on products?

Mikita Mikado: We did. At first, we thought we can manage both at the same time. It was a huge mistake. We hired an external CEO. Unfortunately after six months, the business became hugely unprofitable. At some point, we looked at it and had to let that CEO go. We just sold it to our former employees for a nominal price so they get to keep the business they worked hard at. They’re doing pretty well right now. It is about a 40-people team.

Sramana Mitra: $30,000 recurring revenue in 2013. What happens next?

Mikita Mikado: We looked at this and looked at what our clients do with our product. Through this process, we made a thousand mistakes and learned a lot. Our clients use our products for more than proposals. They use our product for contracts and invoices for the entire deal cycle. They were asking for us to add payments. When we added payments, they started to transact money through our product. They were closing more than half a billion in deals a year.

Sramana Mitra: It became like a contract management system?

Mikita Mikado: It became semi-transactions management system. It was a place for people to make offers and sell their services or goods but it was not made for it. That got us to the vision for Pandadoc, which we’ve been working on for the past three years.

Sramana Mitra: You had a base of users. Is that the same users that you started offering the new system to?

Mikita Mikado: Somewhat. It’s the same profile but we never managed to move these 3,000 accounts to Pandadoc. The amount of development we had to do was just a lot of work. We were not looking at all the proposal-specific features from one product to another. I don’t think we have 3,000 users anymore, but they’re still using the product. That’s the beauty of SaaS. Once you do something in that area, it’s going to work for you for years.

This segment is part 3 in the series : Bootstrap First from Belarus, Raise Money Later from Silicon Valley: PandaDoc CEO Mikita Mikado
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